Tabor,
Can you still turn the ignition lock cylinder with the key? Or is the lock cylinder worn out to the point where it won't turn anymore even with a new key? I believe the ignition lock system was the same from the 70's through the 80's.
On my 84 300SD the key had to be turned to position 2 and a lock pin compression tool slid down the side of the cylinder( there is a channel along the cylinder for the tool to fit and yes you can make your own tool) to release the cylinder from its housing. I believe there is a a trim collar on the ignition lock that needs to be pried off first to see the tool slot.
If the cylinder cannot be turned to line up the locking pin with the tool slot in the housing the whole mechanical steering wheel lock and ignition cylinder ( which are tied together) remain locked in place. Its a great anti theft system until the the lock cylinder fails......then you need to invest in some titanium tipped drill bits...I've been there...its not a happy place to be!

This is from my memory so forgive me if its not real detailed...
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FRED
Daily Driver: 98 E300TD 199K
Hobby Car: 69 Austin Mini
Past Diesels: 84 300SD, 312K
87 300SDL, 251K
94 Chev. K-1500 6.5Ltr.TD, 373K